AI assistant
NAVCO Pharmaceuticals — Management Reports 2021
Mar 2, 2021
47636_rns_2021-03-01_53b5f050-1708-4038-90ac-6cfd9f36f04e.pdf
Management Reports
Open in viewerOpens in your device viewer
==> picture [221 x 66] intentionally omitted <==
FORM 51-102F1 SAINT JEAN CARBON INC. MANAGEMENT DISCUSSION & ANALYSIS
For the quarter ended October 31, 2020
This Management Discussion and Analysis (“MD&A) was prepared March 1, 2021.
This MD&A of the results of operations and the financial condition of Saint Jean Carbon Inc. (“St. Jean” or the “Company”) supplements but does not form part of the audited financial statements and accompanying notes of the Company for the year ended October 31, 2020. Consequently, the following discussion and analysis of the financial condition and results of operations of Saint Jean Carbon Inc. should be read in conjunction with the audited financial statements for the year ended October 31, 2020.
With respect to timely disclosure by St. Jean of data and information in general, and especially in the MD&A, materiality and material information is considered by the Company as something that would be likely to affect the Company’s share price or influence an investor’s decision whether or not to buy, sell, or hold shares once it becomes known to the public.
Additional information can be found on St. Jean on the SEDAR website (www.sedar.com) and on the Company’s website (www.saintjeancarbon.com).
GOING CONCERN
These financial statements have been prepared on a going-concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future. Accordingly, it does not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities in other than normal course of business and at amounts which may differ from those shown in the financial statements.
As at October 31, 2020, the Company has incurred a loss from operations of $4,061,427, has a working capital deficit of $1,785,849, negative cash flow from operations of $200,203 and an accumulated deficit of $23,503,856. The Company’s ability to continue as a going concern is contingent on its ability to obtain additional equity financing.
1
This condition, along with other matters as set forth in the above paragraph, indicates the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.
DESCRIPTION OF BUSINESS
St. Jean is a junior resource company involved in the acquisition and exploration of property interests that are considered potential sites of economic mineralization and the potential use of such mineralization.
Throughout the last few years the Company has placed increasing attention to the design and build of green energy storage such as lithium-ion batteries. With green energy creation, the Company is working towards building materials that will allow the super-efficient transfer of the sun’s energy through graphene such as the photocell. Several patents have been filed and the Company has partnered with universities to develop improved technologies. A processing mill was completed to convert raw materials into technologically advanced materials. Continual work is being done on these processes to develop value in the technology area.
The Company holds multiple historic molybdenum properties in British Columbia and gold properties in Manitoba.
Since 2013, the Company concentrated on the acquisition of lump graphite properties in the province of Quebec, however, the Company has determined that its future lies in developments in technology and with its offtake agreement with Ameca Ltd for graphite in Sri Lanka. Therefore, all properties in Quebec were allowed to have their tenures expire.
St. Jean is a reporting issuer in Alberta and British Columbia and is a listed Tier 2 issuer on the TSX Venture Exchange, trading under the symbol “SJL”. The Company has also registered to trade in the United States on the OTC market under the symbol TORVF. The Company is a Venture issuer and is not required to file an Annual Information Form.
GENERAL DEVELOPMENT OF THE BUSINESS
Saint Jean Carbon Inc. (formerly Torch River Resources Inc. and previous to that Torch River Mines Ltd.) was incorporated on June 18, 1997, by Certificate of Incorporation issued pursuant to the provisions of the Companies Act (Alberta) and extraprovincially registered to carry on business in the provinces of Saskatchewan, Manitoba, British Columbia and Quebec. On March 26, 2004, the Company was officially formed from the amalgamation of Tael Capital Inc. and Torch River Mines Ltd. under the Business Corporations Act (Alberta) under the name Torch River Resources Ltd. The amalgamation was the Company’s Qualifying Transaction for listing on the TSX Venture Exchange. On October 30, 2013, the name of the Company was changed from Torch River Resources Ltd. to Saint Jean Carbon Inc.
On July 8, 2005, the Company signed an option agreement with Red Bird Resources Ltd. (the “Red Bird Option Agreement”) on a molybdenum mineral claim located in
2
the central coastal region of British Columbia. The Company retains a 25% undivided interest in the property which was earned as at May 31, 2008.
On February 12, 2008, the Company signed an option agreement on (the “Mount Copeland Option Agreement”) a past producing molybdenum property located near Revelstoke, British Columbia (the “Mount Copeland property”). The Company through an amending agreement has acquired 100% of the property (subject only to a 2.75% Net Smelter Agreement).
BRITISH COLUMBIA PROPERTIES
Red Bird Property
The Red Bird molybdenum property consists of three mineral claims situated in the Skeena Mining Division of west central British Columbia 133 kilometers southwest of Burns Lake and 105 kilometers north of Bella Coola. The property covers an area of 444.49 hectares centered on latitude 53 ° 17’44” North and longitude 127 ° 00’34” West in NTS map area 93E/6.
On July 8, 2005, Red Bird Resources Ltd and the Company entered into the Red Bird Option Agreement for the Red Bird Property. The Red Bird Property represents an advanced molybdenum, copper and rhenium porphyry target. As of May 31, 2008, the Company became the legal and beneficial owner of a non-transferable 25% undivided interest in the property. In 2008, an NI 43-101 technical report identified an indicated mineral resource of 88,210,000 tonnes grading .061% molybdenum and .068% copper at a cutoff grade of .03% molybdenum on the Red Bird Property.
Mount Copeland Property
The Mount Copeland Property featured underground production (1970-73) which produced 171,052 tonnes of molybdenum ore and produced 1,193,222 Kg of molybdenum. The calculated head grade for this production was 0.732% Mo. When the Mount Copeland Property was in production in 1970 development work indicated 163,340 tonnes of ore at a grade of 1.83% MoS2 (or 1.1 % molybdenum). The ore indicated prior to mining, has been essentially extracted. The information above is included for comparison purposes only (derived from the December 01, 2008 NI 43101 Technical Report and the MINFILE Record Summary for MINFILE No. 082M 002 (Mount Copeland), B.C. Ministry of Energy, Mines and Petroleum Resources and the MINFILE Productions Detail Report, B.C. Geological Survey, B.C. Ministry of Energy, Mines and Petroleum Resources) This can be viewed at:
http://minfile.gov.bc.ca/Summary.aspx?minfilno=082M++002 http://minfile.gov.bc.ca/report.aspx?f=PDF&r=Production_Detail.rpt&minfilno=082M++002
In 2008, there was a 10-hole drill program of 2,878 meters completed. A NI 43-101 Technical Report dated December 1, 2008 was completed and posted on SEDAR on March 16, 2009.
On January 5, 2010, the Company announced results of 31 samples from 7 drill holes from 2008 that were assayed for Rare Earth Elements. A further release dated March 9, 2010 provided mean average values for rare earth elements from the 31 core
3
samples and 53 soil samples. The Mount Copeland option agreement has two claims comprising a total of 730.127 hectares.
SELECTED ANNUAL INFORMATION
The information below has been derived from the Company’s annual financial statements for each of the three most recently completed financial years ended October 31 and has been prepared in accordance with IFRS.
| Fiscal Year | 2020 | 2019 | 2018 |
|---|---|---|---|
| Total revenue | $ 17,166 | $ 115,205 | $ 408,870 |
| Loss for the year | (4,061,427) | (831,744) | (2,187,642) |
| Loss per share, basic and diluted | (0.053) | (0.011) | (0.030) |
| Total assets | 1,369,526 | 4,518,480 | 4,701,078 |
| Total long term liabilities | 23,437 | - | - |
| Cash dividends per share | - | - | - |
The loss for the year ended October 31, 2020 was $4,061,427 compared to $831,744 for the year ended October 31, 2019. The increased loss was primarily due to impairment taken during the current year and higher investor relations expense during the current year.
Total assets as at October 31, 2020 were $1,369,526 compared to $4,518,480 as at October 31, 2019. The decrease was primarily due to lower value for mineral exploration and evaluation assets due to impairment claimed during the current year.
4
SELECTED QUARTERLY INFORMATION (Eight Quarter history)
| Item | Qtr 4/20 Three Months Ended Oct 31, 2020 Qtr 3/20 Three Months Ended July 31, 2020 Qtr 2/20 Three Months Ended April 30, 2020 Qtr 1/20 Three Months Ended Jan 31, 2020 |
|---|---|
| Cash & Cash Equivalents including short term investments Mineral Exploration and evaluation assets Working Capital (Deficiency) Net Sales Loss before extraordinary items Loss after extraordinary items Loss per share, basic Loss per share, fully diluted Total Assets Total Long Term Financial Liabilities |
29,441 839,582 (1,785,849) - (3,642,584) (3,642,584) (0.047) (0.047) 1,369,526 23,437 17,734 3,908,430 (1,414,350) - (102,236) (102,236) (0.001) (0.001) 4,439,162 - 1,372 3,908,430 (1,347,910) 817 (169,856) (169,856) (0.002) (0.002) 4,466,970 - (674) 3,907,664 (1,213,033) 48,783 (146,751) (146,751) (0.002) (0.002) 4,502,467 - |
| Item | Qtr 4/19 Three Months Ended Oct 31, 2019 Qtr 3/19 Three Months Ended July 31, 2019 Qtr 2/19 Three Months Ended April 30, 2019 Qtr 1/19 Three Months Ended Jan 31, 2019 |
|---|---|
| Cash & Cash Equivalents including short term investments Mineral Exploration and evaluation assets Working Capital Net Sales Loss before extraordinary items Loss after extraordinary items Loss per share, basic Loss per share, fully diluted Total Assets Total Long Term Financial Liabilities |
7,723 3,907,664 (1,053,673) 85,205 (145,785) (145,785) (0.002) (0.002) 4,518,480 - 6,349 3,907,664 (939,385) 20,000 (250,161) (250,161) (0.003) (0.003) 4,570,038 - 25,898 3,907,664 (719,021) - (178,545) (178,545) (0.002) (0.002) 4,631,151 - 16,860 3,907,664 (702,954) 10,000 (257,253) (257,253) (0.004) (0.004) 4,624,745 - |
The tables are stated in Canadian dollars. These financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assumes that the company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.
5
RESULTS OF OPERATIONS
Revenue and Cost of Goods Sold for the period ended October 31, 2020
Revenue for the three-month period ended October 31, 2020 was $nil compared to $85,205 for the comparative period. Cost of goods sold for the three-month period ended October 31, 2020 was $nil compared to $17,250 for the comparative period.
Revenue was $17,166 for the year ended October 31, 2020 compared to $115,205 for the comparative period. Cost of goods sold for the year ended October 31, 2020 was $10,766 compared to $25,363 for the comparative period.
Expenses for the three months ended October 31, 2020
Total expenses for the three-month period ended October 31, 2020 were $3,609,384 compared to $213,980 for the comparable 2019 period, an increase of $3,395,404. The major components were:
-
Impairment of $3,068,081 taken during the current quarter vs. $nil taken during the comparative quarter.
-
Investor relations expenses for the current quarter were higher by $138,336 vs. the comparative quarter.
Expenses for the year ended October 31, 2020
Total expenses for the year ended October 31, 2020 were $4,067,827 compared to $921,586 for the comparable 2019 period, an increase of $3,146,241. The major components were:
-
Impairment of $3,068,081 taken during the current year vs. $nil taken during the comparative period.
-
Investor relations expenses for the current period were higher by $128,056 vs. the comparative period.
ADOPTION OF NEW ACCOUNTING POLICY
The standard issued and adopted by the Company in the current year’s financial statements is listed below.
IFRS 16 Leases
In January 2016, The IASB issued IFRS “Leases”, which replaces IAS 17 “Leases,” and provides that a single recognition and measurement model for leases would apply, with required recognition of assets and liabilities for most leases. For lessees, IFRS 16 removes the classification of leases as either operating or finance leases, effectively treating all leases as finance leases. Certain short-term leases (less than 12 months) and leases of low-value assets are exempt from the requirements, and may continue to be treated as operating leases.
6
The Company adopted the standard for the fiscal year commencing November 1, 2019. The standard will be adopted retrospectively by recognizing the cumulative impact of initial adoption in opening retained earnings. Under the standard, the Company will recognize a right-of-use asset under property and equipment (P&E) and a corresponding liability for the lease associated with the Corporation’s warehouse space. Previously, the Company recognized the lease charge associated with this facility as an operating lease expense on a straight-line basis over the term of the lease. The nature of the expenses related to this lease will change since the Company will recognize a depreciation charge for the right-of-use asset and an interest expense on the related lease liability. Consistent with the guidance, the Company will not apply this standard to short-term leases and leases for which the underlying asset is of low value.
On adoption of IFRS 16, the Company utilized the practical expedient to exclude initial direct costs from the measurement of the RUA at the date of initial application. The lease for the Company’s warehouse space qualifies for recognition under IFRS 16.
The Company recorded a RUA of $51,047, an offsetting amount against prepaid expenses of $4,103 and offsetting lease obligation liability of $52,680 with the difference of $5,738 recognized as an adjustment to retained earnings. Under the principles of the new standard these leases have been measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rates at the time of entering into the lease which was estimated to be 6%.
The Company’s undiscounted operating lease obligations at October 31, 2019 were $127,077, as previously disclosed in the Company’s audited annual consolidated financial statements related to lease commitments. The related lease liability recognized on initial application of IFRS 16 at November 1, 2019 is $52,680.
LIQUIDITY AND CAPITAL RESOURCES
At the end of this reporting quarter, St. Jean had a working capital deficiency of $1,785,849 compared to $1,053,673 as of October 31, 2019 of, a decline of $732,176. Cash at October 31, 2020 were $29,441 compared to $7,723 as at October 31, 2019.
The following funding was received during the reporting period.
-
On April 18, 2019, the Company closed the first tranche of a private placement consisting of 4,277,500 units at a price of $0.035 per Common Unit for gross proceeds of $149,713. Each common unit consists of one (1) Common Share in the capital of the Company and, one (1) common share purchase warrant. Each Warrant entitles the holder to acquire one (1) additional Common Share at an exercise price of $0.05 per Common Share for a period of 36 months from the date of issuance.
-
On June 10, 2019, the Company closed the first tranche of a private placement consisting of 285,000 units at a price of $0.035 per Common Unit for gross proceeds of $9,975. Each common unit consists of one (1) Common Share in the capital of the Company and, one (1) common share purchase warrant. Each
7
Warrant entitles the holder to acquire one (1) additional Common Share at an exercise price of $0.05 per Common Share for a period of 36 months from the date of issuance.
- On October 9, 2020 the Company closed on a private placement for 7,905,000 units at a price of $0.025 per unit for gross proceeds of $197,625. Each unit consisted of one common share and warrant.
Advances of $38,000 were received in 2019 on unsecured notes payable, repayable on demand, bearing interest at 10% and 12% per annum, of which $25,000 were repaid during the year, leaving a balance owing of $13,000 as at October 31, 2020.
The Company received an advance of $95,000 USD ($126,521 CAD) on unsecured loan payable, which is non-interest bearing and has no fixed terms or repayments. No stock options were granted or exercised during the period.
Saint Jean Carbon currently does not have credit facilities with financial institutions and does not anticipate that it will generate significant revenue from its activities during the next few months; therefore, it will rely on its ability to obtain equity financing for operations.
Management anticipates that it will be able to raise sufficient capital to further explore and develop its properties and carry out its projects in the future. The Company, however, cannot provide any assurance that equity financing will be available on terms and conditions acceptable to the Company.
As at October 31, 2020, the classification of the financial instruments, as well as their carrying values and fair values, with comparative figures for October 31, 2019 are shown in the table below:
| October 31, 2020 | October 31, 2020 | October 31, 2019 | October 31, 2019 | |
|---|---|---|---|---|
| Fair value | Carrying | Fair value | Carrying | |
| value | value | |||
| Financial assets | ||||
| Cash | 29,441 | 29,441 | 7,723 | 7,723 |
| Accounts receivable(1) | - | - | 5,000 | 5,000 |
| Financial liabilities | ||||
| Accounts payable and | ||||
| accrued liabilities | 1,544,327 | 1,544,327 | 1,099,676 | 1,099,676 |
| Notes payable | 139,521 | 139,521 | 38,000 | 38,000 |
| Interest payable | 1,734 | 1,734 | 868 | 868 |
| Other liabilities | 147,500 | 147,500 | - | - |
| (1) Excluding taxes receivable |
In a prior year, Canada Revenue Agency ("CRA") commenced an audit of the Company's tax filings related to flow-through shares. In the current year, CRA has accepted, in part, the Company's original filing. The Company has recorded a provision of $85,000 related to the obligation to CRA and possible compensation to investors. The Company has also accrued for $62,500 related to a settlement with the Alberta Securities Commission.
8
The following table summarizes the contractual maturities of the Company’s financial liabilities at October 31, 2020:
| Contractual | Less than | |
|---|---|---|
| cash flows | one year | |
| Accounts payable and | ||
| accrued liabilities | $ 1,544,327 | $ 1,544,327 |
| Notes payable | 139,521 | 139,521 |
| Interest payable | 1,734 | 1,734 |
| Other liabilities | 147,500 | 147,500 |
| $1,833,082 | $1,833,082 |
The Company is committed to lease payments as follows:
| 2021 | $ | 22,400 |
|---|---|---|
| 2022 | 14,579 | |
| 2023 | 9,719 | |
| $ | 46,698 |
CONTINGENCY
The Company has been named as a defendant in a statement of claim filed on January 5, 2021 in the Province of Ontario. The plaintiff is seeking $814,820 for unpaid compensation, and $1,000,000 for wrongful termination and damages. The financial statements include a provision for unpaid compensation of $241,820. Management is in the process of filing a statement of defense and counterclaim. The counterclaim against the plaintiff and other non-arm’s length parties seeks damages up to $3 million, plus further amounts which will be particularized prior to trial. As the outcome of this lawsuit and any liability to the Company cannot be reasonably determined at this time, no additional provisions have been made in the financial statements.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements.
CURRENT BUSINESS ACTIVITY
Processing Mill
The Research and Development facility houses an operating processing mill. Continual enhancements have taken place to calibrate the unit to optimize throughput. This mill will be used for the testing of graphite materials and to process mined material, determine its suitability for potential customers and manufacture battery anodes. Third party graphite was processed through the mill this quarter. These samples were crushed, had secondary crushing, air classified, ran through the
9
ball mill, floated, jet milled, shaped and tested. Several potential customers have expressed an interest in the Company processing their material.
The main highlight of the mill is the Company’s proprietary and patent pending processes for greatly increasing the head grade of the mineralized material before fine milling and floating. This allows for significantly smaller equipment and footprint as the process is working mostly with nearly finished product and does not need to process large amounts of waste material. The facility will be able to create a wide variety of sizing and shaping without waste. No harsh chemicals are used to increase the purity.
This facility is to produce the very best quality graphite for a host of applications: lithium-ion batteries for electric cars, tools, cell phones, etc.
Research / Product Development
On December 20, 2016, the company announced that the collaborative research with a team from Western University has created glowing carbon dots. The carbon dots have been created to glow in an entire array of colours. The significance of the technology is the ability to create light and colour with less energy consumption.
On February 23, 2017, the Company announced that it has set the preliminary numbers for the graphene battery project announced on January 18[th] , 2017.
On February 28, 2017, and subsequently clarified on March 3[rd] and 20[th] , 2017, the Company announced that it received an order for 5 kg of graphite for testing by a major battery manufacturer.
On March 8, 2017, the Company announced that the St. Jean co-authored with Western (Jin Zhan, Ph.D., Associate Professor Department of Chemical and Biochemical Engineering) published a paper titled, “Deposition of YBCO Nanoparticles on Graphene Using Matrix-assisted Pulsed Laser Evaporation” that has been accepted for presentation and publication in the proceedings of International Conference on Nanotechnology: Fundamentals and Applications (ICNFA’17).
On April 20, 2017 St. Jean announced the results of the graphene battery project phase one of three, previously announced on January 19, 2017. Although very preliminary at this point, the graphene battery outperformed the graphite battery.
On June 14, 2017 the Company announced that it had completed a full cell graphene battery.
There were two university research projects which the Company participate in during the quarter. These projects were with the Universities of Western and Waterloo. The first participation project and grant is for the continued collaborative research and development of modification and scale-up of graphene for supercapacitor applications. A supercapacitor made with graphene is very similar to a graphene lithium-ion battery, except that the supercapacitor battery may have a higher rate of charge and discharge. The second project and grant is for the collaborative research and
10
development of luminescent carbon dots for multi-applications. The Company will work to further the research that was started last year with the development of carbon dots which may be used for a variety of applications such as the use of dots for solar panels as the Company continues to develop energy storage solutions.
Summary
The Company has devoted resources to the Research and Development facility and in building of a Processing mill. This and efforts with Waterloo and Western have been done to move toward enhancing the quality of graphite material and the design and build of green energy storage such as lithium-ion batteries, using Sri Lankan graphite that could be used in electric cars, mass energy storage for home applications and for small batteries for a typical TV remote control. We strive to create the best carbon for the anode in such devises. With green energy creation, we are working toward building materials that will allow super-efficient transfer of the sun’s energy through graphene as the photocell. Green re-creation is the final step in development of materials that can be reused to recreate the original purpose of the materials. All of this is challenging but we feel we have placed the company at the forefront of the green technology boom and with that created strong shareholder return on investment. Through its working arrangements with universities, research and efforts, the Company has continued to expand its intellectual property.
The direction and goal of the Company is to be a leading-edge company and to align with clean energy creation and energy storage companies around the world.
We continue to pursue sales and other revenue streams through offtake agreements, joint ventures, acquisitions and material trade. We are working with universities in both Canada and the United States with an eye on licensing and developing our own intellectual property. We feel that putting significant efforts to graphene production / development will put the company in a good position to grow and take advantage of what we feel is the next big development in the carbon business. We see the company working as a partner with companies that want to have advanced materials as a part of their product, but we do not see ourselves as the manufacturer of the application, rather the supplier of the high-grade material to a specific specification.
RISK AND UNCERTAINTIES
Exploration and mining companies face many and varied kinds of risks. While risk management cannot eliminate the impact of all potential risks, the Company strives to manage such risks to the extent possible.
One of the principal activities of the Company is mineral exploration which is inherently risky. Exploration is also capital intensive and the Company currently has no significant source of income. However, the Company has placed increasing emphasis and resources on green energy storage and this will mitigate some of the risk. Only the skills of its management in the mineral exploration and exploration financing serve to mitigate these risks and therefore are one of the main assets of the Company.
11
SHARES ISSUED AND OUTSTANDING
ISSUED SHARE CAPITAL
Statement of Changes in Shareholders’ Equity, Common Shares
| Beginning balance Private Placements Share issuance costs Warrant Redemption Flow through shares Balance Beginning balance Private Placements Share issuance costs Warrant Redemption Flow through shares Balance |
October 31, 2020 Number of shares Share Capital |
October 31, 2020 Number of shares Share Capital |
|
|---|---|---|---|
| 75,892,532 $21,011,573 7,905,000 197,625 - (18,454) - - - - |
|||
| 83,797,532 $21,190,744 October 31, 2019 Number of shares Share Capital |
|||
| 71,330,032 $20,882,797 4,562,500 159,688 - (30,912) - - - - |
|||
| 75,892,532 | $21,011,573 |
As of March 1, 2021, the date of this MD&A, the Company has the following common shares, stock option and warrants outstanding:
| Common shares | 89,791,282 |
|---|---|
| Options | 7,560,000 |
| Finders warrants | - |
| Share purchase warrants | 22,377,000 |
12
OPTIONS
| Number of | Weighted Average | |
|---|---|---|
| options | Exercise Price | |
| Balance, November 1, 2019 | 1,055,172 | $0.20 |
| Granted | - | - |
| Expired | (795,172) | $0.20 |
| Exercised | - | - |
| Balance October 31, 2020 | 260,000 | $0.20 |
Options Granted
A summary of outstanding options as at October 31, 2020 is as follows:
| ry of outstanding options as at October 31, 2020 is as follows: | ry of outstanding options as at October 31, 2020 is as follows: |
|---|---|
| Number of Shares Exercise Expiry Under Option Price Date |
|
| 150,000 $0.20 April 5, 2021 35,000 $0.20 November 8, 2021 75,000 $0.20 January 13, 2022 260,000 |
FINDER’S OPTIONS
On November 24, 2016, 124,500 (adjusted for 4:1 consolidation) Finder’s Options were granted at a price of $0.20 per share, for a period of three years and all expired during the year.
On December 12, 2016, 487,317 (adjusted for 4:1 consolidation) Finder’s Options were granted at a price of $0.20 per share, for a period of three years and all expired during the year.
WARRANTS
A summary of outstanding warrants as at October 31, 2020 and October 31, 2019 is as follows:
| summary of outstanding warrants as s follows: |
at October 31, 2020 and October 31, 2019 |
|---|---|
| Balance, October 31, 2018 Granted Expired Exercised Balance October 31, 2019 Granted Expired Exercised Balance October 31, 2020 |
Number of Warrants Weighted Average Exercise Price |
| 16,845,750 $0.19 4,562,500 $0.05 (4,557,500) $0.23 - - |
|
| 16,850,750 $0.14 7,905,000 $0.05 - - - - |
|
| 24,755,750 $0.11 |
13
A summary of outstanding warrants as at October 31, 2020 is as follows:
| Number of | Exercise | Expiry |
|---|---|---|
| Warrants |
Price | Date |
| 3,222,500 | $0.22 | December 12, 2020 |
| 695,500 | $0.20 | January 25, 2021 |
| 2,002,750 | $0.20 | February 8, 2021 |
| 1,705,000 | $0.22 | May 17, 2021 |
| 1,162,500 | $0.22 | May 29, 2021 |
| 2,400,000 | $0.075 | June 28, 2021 |
| 1,100,000 | $0.075 | July 18, 2021 |
| 4,277,500 | $0.05 | April 18, 2022 |
| 285,000 | $0.05 | June 10, 2022 |
| 7,905,000 | $0.05 | October 9, 2023 |
| 24,755,750 |
RELATED PARTY TRANSACTIONS
During the reporting quarter, the Company incurred charges from the board of directors, chief executive officer, chief financial officer, president and chief technology officer. The total related party transactions for the period is summarized as follows:
| Key Management Compensation Retainers, wages and benefits Cost of goods sold |
Year ended October 31, 2020 2019 |
|---|---|
| $ 306,990 $ 390,947 10,000 5,000 |
|
| Total | $ 316,990 $ 395,947 |
| Management and consulting fees Company controlled by the former CEO Partnership of which the former CFO is a partner Company controlled by the former President Company controlled by a senior Officer Business controlled by an Officer Business controlled by the President |
Year ended October 31, 2020 2019 |
|---|---|
| $ - $ 179,000 39,990 40,747 110,000 96,200 120,000 80,000 10,000 - 37,000 - |
These transactions occurred during the normal course of operations.
RELATED PARTY LOANS
The Company currently has unsecured promissory notes payable to a senior officer and director of the Company, due upon demand, bearing interest at 10% per annum in the amount of $13,000 ($13,000 – 2019).
14
SUBSEQUENT EVENTS
Subsequent to year-end, an unrelated party advanced $100,000 on a promissory note. The note is unsecured, due on November 14, 2021 and bears interest at 12% per annum.
Subsequent to year-end, on December 23, 2020 the Company received a subscription for a private placement of 3,500,000 shares at a price of $0.035 per unit for gross proceeds of $122,500.
Subsequent to year-end, on December 14, 2020, the Company issued 7,300,000 options to directors, officers and consultants of the Company with an exercise price of $0.05. The options expire on December 14, 2025.
Subsequent to year-end, on January 18, 2021 the Company issued 1,398,750 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $69,937.
‐ Subsequent to year end, on February 17, 2021 the Company issued 980,000 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $49,000.
Subsequent to year-end between December 1, 2020 and February 22, 2021, the Company entered into promissory note agreements with the President for a total amount of $250,000. The notes are unsecured, due between December 1, 2021 and February 22, 2022, and bear interest at 12% per annum.
PROPOSED TRANSACTION
On February 10, 2021, the Company announced that it had signed a letter of intent, dated February 5, 2021, with 2 arm’s length vendors to purchase all of the issued and outstanding shares of Solid Ultrabattery Inc. (“SUB”), a private Ontario company involved in the research and development of solid state batteries. Subject to the approval of the TSX Venture Exchange (“TSX-V”), the Company intends to fund the purchase of all of the issued and outstanding shares of SUB by issuing 20 million common shares in the capital of the Company at a price of $0.06 per Common Shares, which is within the allowable discount permitted by the TSX-V Policies, for a deemed aggregate purchase price of CAD $1,200,000. This is an arm’s length transaction.
APPROVAL
The Audit Committee of the Board of Directors appointed by the Board and consisting of three independent directors, has reviewed this document pursuant to its mandate and charter. The Board of Directors of Saint Jean Carbon Inc. has approved the disclosure contained in the MD&A.
This MD&A is available on the Company’s SEDAR site accessed through www.sedar.com
15
FORWARD LOOKING STATEMENTS
The MD&A contains certain forward-looking statements, except for historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, levels of activity, performance, and/or achievements expressed or implied by these forward-looking statements to vary.
Actual results could differ materially from those currently anticipated due to any number of factors, including such variables as new information regarding potential mineral reserves, changes in demand for and commodity prices of graphite, molybdenum or any other commodity, legislative, environmental and other regulatory approval or political changes.
16